13 hours ago | July 31st, 2014 12:07:16 GMT

It’s all about the jobs baby

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Eurozone, German & Italian unemployment and Challenger layoffs have flowed under the bridge so far today and up next is US initial jobless claims followed by US Q2 employment costs. It all comes before the big US jobs report tomorrow.

Initial jobless claims fell bellow the 300k mark last week to 284k and the market is looking for a 301k number this week. The four week average paints a more sustained picture and could drop below last week’s 302k to break the 300k number.

Employment costs will add to the inflation data with costs expected to rise 0.5% from 0.3% prior. A much larger than expected number might give the rate rise crew some more ammo.

Sandwiched in between all that is the monthly Canadian GDP data from some lagging point this year. Actually it’s from May and Moose herders want to see a rise of 0.3% from 0.1% in April. Man, they’re so behind. Have we had their Q1 GDP data yet?

That’s all coming up halfway past the next hour (about 30 mins in English) and last on the list for the main data is the Chicago business barometer PMI at 14.45 gmt +1. We’re looking for an uptick to 63.0 from 62.6 prior.

The dollar is holding the gains from yesterday which will be encouraging the bulls. With the jobs market being less of a worry now upside surprises in NFP may have limited effect in the buck (unless it’s a really big number). The main risk for longs will be a poor number but there’s been enough in the recent jobs indicators to suggest that’s not going to happen. The NFP though does like to catch us with our pants down once in a while which is why it’s such a great event.

So a last round of numbers before we head on to tomorrows (hopefully) big one.

1 Comment

14 hours ago | July 31st, 2014 11:40:38 GMT

Reuters poll has world’s leading investors raising equity holdings in July to the highest since March 2012

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  • average recommended exposure to equities rose 52.5% from 51% in June

Frothy bubble buying or astute investment strategy ?

  • same investors cut bond holdings to lowest since April 2012
  • 32.5% vs 35.6% prev

The results of the monthly Reuters poll of 49 fund managers and chief investment officers in the US, UK, Europe and Japan,taken in the past 2 weeks  show they bought more stocks in July than at any point in more than two years, speaheaded by a push into Europe and growing confidence in its economic recovery

Faith in the global recovery and relatively accommodative policies from major central banks broadly eclipsed rising geopolitical concerns, although US investors were particularly cautious

US fund managers have been extremely cautious putting almost 5% of their investments into cash, the highest since the US sub-prime crisis began in Jan 2008

European fund managers were notably bullish making their highest allocation to equities since Jan 2011 while UK investment managers pared back their holdings of govt debt in July and pumped more money into stocks befre the exepcted rise in interest rates

Of the three I’m backing the cautious Americans and it will be interesting to see the impact of  recent slides on all their August positioning and indeed what they may already have adjusted in recent days.

1 Comment

14 hours ago | July 31st, 2014 11:18:27 GMT

Argentina’s Capitanich says they are not in technical default

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Comments from the cabinet chief on Rtrs following the earlier ruling

  • govt has no role to play in debt talks between private parties
  • says mediator Pollack was ” incompetent”
  • bond holders must demand money held up by judge
  • Argentina looking to open proceedings at The Hague
  • govt will keep policies to stimulate the economy

The BBC has more here on Argentina’s second default in 13 years and we can expect this latest saga to cast a shadow over the markets

 

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14 hours ago | July 31st, 2014 10:56:53 GMT

ForexLive European morning wrap: USD still in demand after FOMC fallout

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Forex trading headlines from the European morning session 31 July

News:

Data:

It’s been a varied session but the greenback still has a bid tone after the corrections seen in the wake of Yellen’s less than hawkish tones yesterday

Month-end flows, notably the usual EURGBP buying, as well as a continuing USD-positive sentiment have given us some decent moves this morning as GBPUSD got sold down to 1.6870 from 1.6903 ,exacerbated by weaker house price data. EURGBP has risen from 0.7914 to 0.7942 only to find some more offers as Eurozone CPI came in on the soft side again.

EURUSD has been caught in the cross play crossfire but it too has dropped to the 1.3380 support area from 1.3405 with EURJPY offers at 138.00 also adding some weight.

USDJPY had a little dip to 101.72 on a late Nikkei dip but since rallied to look at 102.90 again with fresh offers above 103.00 providing a cap while USDCHF has ground its way back higher to 0.9094 after Asian dip to 0.9077

AUDUSD got slapped through 0.9300 triggering stops to 0.9288 but has steadied since while NZDUSD has been on the back foot but steady around 0.8490. USDCAD has mostly had the morning off around 1.0910 with CAD buyers coming up against USD buyers.

US initial jobless claims coming up at 12.30 GMT but attention mostly on tomorrow’s NFP release as the guessing game continues.

2 Comments

15 hours ago | July 31st, 2014 10:25:16 GMT

Portuguese stock market taking a battering over Banco Espirito Santo

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The Portuguese PSI 20 stock index has been down over 4% today after the shocking Banco Espirito Santo H1 results that came after the European close yesterday.

As you can imagine the shares opened up massively down this morning but have staged a mild recovery

Banco Espirito Santo 31 07 2014

Banco Espirito Santo 31 07 2014

Even with recapitalisation issues the Bank of Portugal have got more than enough in their recap fund but governor Carlos Costa only wants to use that as a very last resort.

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